Optimized Pricing Delivers $15 Million Margin Improvement in North American Lubricants Division in First Year

One of the largest investor-owned oil and gas companies in the world, this company has expertise in exploration, production, refining, and marketing of oil, gas, and chemicals products.

The company is one of the world’s largest suppliers of lubricants for industrial, automotive, aviation, and marine applications, delivering market-leading solutions to consumers in over 100 countries.

Before implementing Pricefx, the company used in-house developed tools for price and margin management, however, the pricing, sales, and commercial teams faced many challenges. One major limitation identified was the inability to identify deal-level margin improvement opportunities.

Additionally, disconnected data across deal-making processes led to misaligned business workflows. Most importantly, core pricing processes (including quoting), lacked intelligent sales team guidance which directly contributed to margin compression.

Legacy manual data entry and analysis workflows caused significant pricing and process inefficiencies. This fragmented process impacted customer centricity, resulting in slow and inconsistent quoting, deal set-up, and contracting. Manual errors in formula price management further impacted the margin.

Strategically, the existing tools were determined to be inadequate for systematically deploying the necessary value-driven price guidance needed to stay competitive and deliver improved business outcomes.

To address these challenges, the company partnered with Pricefx to implement a solution that automates key pricing and margin processes while integrating peer pricing into quotes.

The primary objectives for the Pricefx implementation were to:

• Provide sellers with improved guidance by taking a more data-driven approach to pricing and quoting

• Streamline deal-making processes and align sales quoting and related business workflows

• Enhance analytics and insights capabilities for improved decision-making

This customer successfully deployed Pricefx capabilities including:

• AI Optimization, including a customer and product segmentation model and price guardrails, providing optimized target prices to sellers. Developed in collaboration with a strategic consulting partner, the solution was delivered via the Pricefx Optimization Platform. The solution involved comparing current prices with manual proposals from the user and target prices from Pricefx Optimization.

• Quoting provides the sales team with visibility into target pricing within a standard process. Teams gained additional visibility into deal scoring, as well as customer and product segment analysis, to support the evaluation of overall deal-level margin.

• Analytics provides pricing insights including the ability to identify opportunities and act in a repeatable and data-driven manner.

Within one year after implementing Pricefx, the company realized significant improvement in key business metrics:

• Deal Score: The sales team recorded a 33% initial upward trend in deal scores in the first four months, reflecting improved commercial decision-making.

• Margin Improvement: Implementation of AI Optimization in combination with sales execution and insights resulted in a gain of $15 million over one year for the North American Lubricants division.

• Operational Efficiency: Improvements in price execution and operational efficiency were observed as well as improved customer experience.